Definition of Paid In Capital

Paid-in capital is the amount that a company raises through the issuance of common shares and against which the amount is completely paid at the time of issue. This will include the face value or par of the shares and also the excess value over par value at which they were issued.


This is represented in the equity section. This should not be confused with the additional paid-in capital that refers to the amount that is added to the par value and premium paid by the investors at the time they were issued. The Additional paid-in capital is a reserve and is used to provide backup to absorb losses.

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